Heavy discount narrows as monthly trading cycle begins

Canadian heavy crude’s discount narrowed versus the U.S. benchmark West Texas Intermediate (WTI) on Monday, the first day of the monthly trading cycle.Western Canada Select (WCS) heavy blend crude for July delivery in Hardisty, Alberta, traded at $6.55 per barrel below WTI, according to NE2 Canada Inc, narrower than Friday’s settle of $7.10 under.

Analysts at Tudor, Pickering, Holt & Co last week said steam-driven oil sands production in April fell to 1,345 mbpd in April, down 167 mbpd from March and the lowest level since May 2017.

A rebound in U.S. refining faces headwinds from a slow economic restart domestically and from the spread of COVID-19 in Latin America, where a majority of U.S. gasoline and diesel exports flow, analysts at Bank of America Merrill Lynch said.

Global oil prices rose on reports that OPEC and Russia were close to a deal on extending output cuts, although rising U.S.-China tensions weighed on sentiment